DRIP investing

The acronym DRIP stands for Dividend-ReInvestment Plan. DRIP let participating shareholders collect their cash dividends in the form of additional shares without paying a commission.

For example, if you own one share of a stock trading at $100 per share today and the company pays a $5-per-share dividend, your dividend would equate to 0.05 shares of stock. After the dividend, you would hold 1.05 shares.

It's a great way of increasing your shares which would result in gaining additional dividends! As I've said in previous posts, I own many company stocks that offer dividends. My highest yielding dividends come from Compania Cervecerias Unidas (NYSE:CU) @ 6.7% annual yield and Pengrowth Energy Trust (NYSE:PGH) @ 14.88% annual yield.

Check with your brokerage to verify that you are enrolled in any DRIP offered from the stocks in your portfolio.